The freight escape: why it’s time to get back on track

Date: 15/05/03

By Karen Carstens

Liberalization of EU railways is essential to improving freight services, says Community of European Railways' executive director Johannes Ludewig.

THE future is in freight, but "cargo doesn't vote". Therein lies its problem, says Johannes Ludewig, executive director of the Community of European Railways (CER), referring to the public's love affair with the car, and hence the roads they drive on.

More than 50 of European railways' freight is comprised of cross-border traffic, compared with only 10 of passenger services.

But most member states have "spent decades investing in motorways, not railways," laments Ludewig, 57, a former chairman of Germany's state railway company, Deutsche Bahn.

To help raise the political profile of freight traffic, Ludewig's Brussels-based staff have been busy planning what CER has heralded as "the first major pan-European conference on freight", set to take place in Munich on 22-23 May.

The two-day event, which features several political bigwigs including the Italian and German transport ministers, is co-organized by the International Union of Railways, the International Union of European Railway Industries and Deutsche Bahn's freight arm DB Cargo.

Rail has been steadily losing its share of Europe's freight market for years: only 8 of goods are carried by rail today, compared with 21 in 1970. Moreover, the length of the EU's rail network has shrunk by 10 over the same period.

Cross-border services are seen as key to improving the viability of international rail freight, which has a sluggish average speed of 18 kilometres per hour that provides a partial explanation for its declining market share.

Still, Ludewig claims opening up the EU's rail freight market easily offsets any criticism of speed or the costs of constructing new tracks - usually far higher than constructing new roads, as extra tunnels and bridges must be built, depending on the lay of the land, to accommodate the tracks.

"The longer the distance a freight train travels, the more economically feasible rail freight becomes," he says, adding that a freight train transporting goods from Germany to Spain, for example, would "beat a truck every time".

A giant step towards liberalizing the EU's freight market was taken on 28 March, when EU transport ministers voted to open up their railways to greater competition between freight operators by endorsing the so-called second railway package.

The deal will force national rail firms to allow competitors to use their tracks for international freight from 2006 and domestic traffic from 2008, but does not include the more politically sensitive passenger services, which several member states, including France, still jealously guard as their own.

For Ludewig, considering 90 of the EU's passenger traffic is domestic, focusing on liberalising the freight market first is the best way forward. Greater competition, however, "is a necessary yet not sufficient condition" to get the freight market back on track, he warns, adding that policymaking focus must also be shifted from road to rail, for environmental and economic reasons. Nevertheless, he says the European Commission must be praised for striving to strike the right balance on this front in its current transport policies.

Funding remains an eternal sticking point, as the Commission can, under its own rules, fund only 10 of the EU's Trans-European Networks (TENs) - a web of road and rail networks (and other infrastructure projects) criss-crossing the Union.

"That leaves member states, whose coffers are not exactly full, public-private partnerships [PPPs], or infrastructure charging to pick up the financial slack. When it comes to infrastructure, PPPs usually only seem to work when governments are involved." As an example, Ludewig cites the Channel Tunnel as a "technological wonder but a financial disaster".

The TENs require investments of some €350 billion - or an estimated €450-€500 billion after enlargement - to be fully realized, so the best way forward is "cross-model charging", also known as infrastructure charging, he feels.

Truck tolls, such as a new system set to be introduced on Germany's autobahns this autumn, serve to spread much-needed cash from road to rail. The German government expects to collect €3.5 billion annually from the toll.

At the same time, Loyola de Palacio, the transport and energy commissioner, last month put forward a proposal for a directive on a single European electronic toll service that would apply to all types of roads, as well as to bridges, tunnels and ferries.

This is music to Ludewig's ears, seeing as some of the fees collected would go directly to Europe's railways.

However, the Hamburg-born Christian Democrat, known as a workaholic Macher ('doer') in his native Germany during a political career that included a post as under-secretary in former chancellor Helmut Kohl's economics ministry, would like a proposed framework directive on infrastructure charging to see the light of day.

Yet virtually all that remains of that idea, thanks in part to intense lobbying from the motor industry, is the so-called 'Euro-Vignette' tolls' directive.

Still, Ludewig is quick to say it would be unfair to point the finger at the Commission alone for failing to float the infrastructure charging proposal so close to both environment and transport groups' hearts, as the issue remains complex and contested.

The energetic and intense Ludewig, whom many observers say has turned up the volume of the EU railways' combined voice via CER considerably since he came to Brussels a year ago, says the main problem is planning ahead.

"You need to plan infrastructure projects well in advance, because of all the time it takes to turn them into reality," he cautions, adding that this makes time all the more of the essence when it comes to properly planning the organization of rail networks.

"Freight transport is growing more international, but we do not have the infrastructure necessary to handle this growth," he says.

"The railways are a system, not a random collection of operators or firms. For trains to function efficiently, we must all be singing from the same hymn sheet."

For example, talks went on for 30 years about a planned Brenner Pass tunnel between Austria and Italy, and out of some 14 infrastructure projects proposed at a European Council meeting in Essen, Germany, in 1994, only three have been realized.

To turn more projects into reality, movers and shakers, such as former commissioner Karel van Miert who currently heads up a special transport working group advising the Commission, need to actually travel to the capitals and regions tasked with implementing a given project.

"We need to do more on the 'follow-up front'," Ludewig says, recalling how the most rewarding experiences he had in the Kohl administration, when he was tasked with organizing some of the reconstruction efforts in eastern Germany dubbed Aufbau Ost, were those where he met regional officials responsible for implementing programmes being crafted in Bonn.

As for fears voiced by environmentalists that many new member states would rather build motorways than anything else, he is quick to leap up from the chrome-and-glass table in his spacious office overlooking Brussels' bustling Avenue des Arts and point at a massive multi-coloured map of Europe gracing his wall, boldly criss-crossed by existing and proposed railway networks.

"The Poles have already completed the 160 kilometres of their bit of a new route between Warsaw and Berlin," he says, pointing to a long chunk of land between Warsaw and the German border city Frankfurt an der Oder. "Look how much shorter the bit is between Berlin and Frankfurt an der Oder - the Germans haven't managed to finish it.

"Of course, one cannot blame citizens of countries that didn't have the same fancy autobahns and flashy cars their Western neighbours did for decades for wanting the same thing," he adds, "but one must not look down on them for that.

"After all, we made all the worst mistakes possible ourselves, so who are we to tell them what to do?"

The key, he concludes, is open dialogue leading to a truly common market in freight, which Ludewig hopes could become a reality in the next five years.

The executive director of the Community of European Railways, Johannes Ludewig, has said that the liberalisation of the EU's railways is essential to improving freight services.